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I'm Struggling to Pay My Mortgage… What Now?

by Charlie Allred

This is a question that seems to be thought by many Arizona homeowners, but not really asked.  The situations vary slightly, but most are the same, you, the homeowner is devastated by the loss of money/ equity in your home.  You see homes in the neighborhood selling for maybe 50% less than what you paid for your home and maybe what you owe to the mortgage company/bank.  This is a devastating feeling.  Worse yet, maybe you lost your job, fell behind on payments or the worst case you are in foreclosure.  You received the notice from the bank that they will auction your home in 3 months.

  1. Deal with reality – this problem isn’t going away.  Running from the home and leaving the home vacant only hurts your neighbors.
  2. Ask yourself if you have regular income? - Have you had this income for the last 2 years? Does your income support the home?   If you answer yes to all of these questions, a loan modification may work for you.  If you answer no to any of these questions, you will be denied for a loan modification.  Only half of one percent of those who apply for a loan modification are able to obtain a permanent loan modification.
  3. Take charge – Decide you do not want a foreclosure on your credit report- this affects your credit for 7 years.  All of your other debt- credit cards, car loans, any loan- the interest rate can be raised to the maximum allowable by law- 29.99% as soon as a foreclosure is on your credit report.  It also affects government clearance, ability to get a new job and ability to get new credit.
  4. Realize you will have to move – but you are in control.  We will negotiate for you with your bank for debt forgiveness.  This preserves what is left of your credit and will allow you to buy again in 2 years.
  5. Call me – we have all the paperwork needed and will manage the situation the best way possible.

Benefits of a short sale

  • Preserve your credit- you can purchase a home in 2 years
  • The home you purchase in 2 years,  will still cost less than your current home
  • You are in control- negotiating with the bank for debt forgiveness
  • You will be able to live in your current home for free, not making payments until the sale is complete
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